By Charlene Sims, info@linncountyjournal.com
MOUND CITY – Linn County Commission Chair Jason Hightower provided a spreadsheet to the other commissioners on Monday, March 11, outlining what the county would receive in taxes from Clearway Energy Group if they built in Linn County.
Because the state of Kansas has exempted the first 10 years of property taxes from renewable energy companies, the county will not receive any taxes the first 10 years, and in years 11 through 35, the county will be able to collect taxes on the installations, which by then will have depreciated down to 20 percent.
Hightower pointed out that when the Kansas Legislature decided to exempt the first 10 years of property taxes, the state, in the Linn County scenario with Clearway, would only lose $278,000 compared to the county not receiving more than $7.6 million.
According to Hightower’s spreadsheet , other entities in the county would not receive the following amounts:
Prairie View USD 362, $8.2 million;
Library District No. 2 (La Cygne Library) about $546,000;
Rural Fire, almost $307,000;
Extension District No. 16, more than $138,000;
Lincoln Township, more than $84,000;
Lincoln-Scott Hospital District, nearly $73,000; and
Cemetery District No. 1, more than $11,000.
The total loss to Linn County and its government entities during that first 10 years is projected to be $17.27 million.
“The state has done a good job again giving away our revenue to try to bring in projects, you agree?” asked Hightower.
“Or take your money and not give it back,” said Commissioner Jim Johnson with a laugh.
“I mean, this is based on the regulations we have right now, correct?” asked Commissioner Danny McCullough. “If we do change our regulations with the red lines, EDF is not going to happen right now.”
Hightower said that he was just trying to show what it would do in different taxing districts.
“If the regulations were to change, this could go away,” said McCullough.
“It very well could,” Hightower said. “We could also turn it down as a conditional use permit,” said Hightower.
Hightower developed the spreadsheet so that the county commissioners would know what they were losing in taxes and so they could better bargain for a payment in lieu of taxes (PILOT).
While counties are not allowed to negotiate with renewable energy companies before a conditional use permit is approved, discussions are often held on the options.
In a telephone interview, Hightower said that he wanted the county to be prepared with information if and when the negotiations begin. He said other counties have been offered low figures and he did not want that to happen to Linn County.
Clearway representatives have offered a variety of different PILOT options to Linn County.
McCullough expressed concern that most of the Clearway PILOT and taxes would only go to the Unit 11 taxing district, which includes the Prairie View School district. Prairie View receives a large amount of money at present from the taxes on the Evergy power plant.
Hightower pointed out to McCullough that the PILOT money for the first 10 years from Clearway would go to the general fund for the county and could be distributed any way the commissioners decided. Hightower suggested that the money be used for developing the industrial park in McCullough’s district.
Hightower’s spreadsheet also included other tax scenarios besides Clearway’s proposed solar project in the Unit 11 taxing district.
The spreadsheet showed the possibility of EDF Renewables using the leases it has obtained, many in the Unit 41 taxing district, which includes Pleasanton USD 344 school. A third hypothetical scenario was presented that had an industrial solar facility built in the Unit 30 taxing district, which includes part of Centerville township and the Jayhawk School District.
At present, no leases have been obtained in the Centerville area, and Hightower used it as an example of how different areas of the county would receive funds if a solar facility went in.
He stressed that these figures were based on Clearway’s per megawatt calculation and EDF’s published megawatts for their project. There is no information beyond megawatt size provided by EDF, and this is strictly an exercise in showing what effect a project could have on that taxing district.
Using the same formula but different megawatts depending on proposed number of acres, the Pleasanton school district could actually receive more money from taxes than Prairie View would for years 11 through 35 when the property taxes could be collected.
EDF’s published megawatts for the solar facility that company is considering is 250 and that is the figure that Hightower used in his calculations. At that rate the Pleasanton school district could receive just over $430,000 per year from the EDF project. No PILOT option has been presented by EDF. These figures are strictly an exercise in comparing possible projects. Under this scenario, the Prairie View District would receive nearly $342,400 per year.
In the hypothetical scenario, Jayhawk could receive $341,000.
Clearway Solar representative Josh Framel met with the Linn County Commissioners at the Monday, March 4 and March 11 commission meetings to discuss the PILOT program possibilities from Clearway to the county if they build a commercial solar installation near the power plant.
Framel has been presenting different PILOT amounts to the county for several weeks. One offer was for $1,300 per megawatt per year, resulting in $418,600 per year or nearly $4.2 million for 10 years. Other offers have included a $1,600 flat per-megawatt rate to the county that would amount to about $515,200 per year or $5.15 million for 10 years.
Another offer has been $1,500 per megawatt per year with a 2% annual escalator that would result in a pay out of $5.29 million for 10 years with each year being a different amount because of the escalator.
McCullough has continued to question what Clearway would make from the project in an effort to negotiate a higher PILOT payment. Clearway and other companies are not required to divulge what they will be making from the project.
Hightower’s spreadsheet showed McCullough what the county would be losing in taxes as a means of negotiating.
Until the county solar regulations have been reviewed and finalized, many variables exist for the exact size of the project that Clearway can propose. When the regulations are completed, Clearway will know for sure what size project they can build in Linn County.
If a prohibition is put into effect, no project will be built.
McCullough also continued to express dissatisfaction with the possibility that the Unit 11 district will be getting all the money and the rest of the county will stay the same.
Hightower’s spreadsheets show that while the Clearway project would put revenue into the Unit 11 taxing district, La Cygne and Prairie View, the EDF project could do the same for the Unit 41 taxing district of Pleasanton City and school district.
“Why are we even talking about it then, just end it,” Hightower said to McCullough. “Why are we going through this charade. Why are we having this fight if you’re not . . . ”
“It’s not a fight, it’s a negotiation, isn’t it?,” said McCullough.
“Well, what are we negotiating, you and me?” asked Hightower.
“No, I’m just trying to figure out why you’re not in Linn County, just your district,” said McCullough. “I’m for all of Linn County.”
Johnson said he thought it was a moot point until the planning commission decides what it is going to do.
For more than three decades, members of the county commission have discussed what businesses could be developed to replace the revenue that the county has been collecting when the power plant closes down. The present Evergy facility provides approximately $14.5 million to the county’s budget yearly.
Of that $14.5 million, the county receives approximately $6.4 million dollars. Some of the other entities that receive part of that tax money are Prairie View USD 362 at $6.9 million; Linn County Library District No. 2 (La Cygne Library) at almost $459,000; Rural Fire at $257,900; state of Kansas, $234,200; the Extension District No. 16, $117,10; and other government entities including the Lincoln-Scott Township hospital board and local cemetery districts.